Argentina's midterm election hands landslide win to Milei's libertarian overhaul

Early results inArgentina’slegislativeelections on Sunday showed alandslidevictory for President Javier Milei as votersoverwhelminglybacked his free-market reforms and deep austerity measures, providing a strong boost for thelibertarianleader to continue his economicoverhaul.

The president’s party, La Libertad Avanza, scored 41.5% of the vote in Buenos Aires province compared with 40.8% for the Peronist coalition, according to official results. The province has long been a political stronghold for the Peronists, marking a dramatic political shift.

Nationwide, La Libertad Avanza got 64 seats in the House of Deputies, up from 37, according to government figures.

Milei was aiming to boost his small minority in Congress and maintain the support of U.S. President Donald Trump, whose administration recently provided Argentina with a hefty financial bailout but hasthreatened to pull awayif Milei did not do well.

Half ofArgentina’slower Chamber of Deputies, or 127 seats, as well as a third of the Senate, or 24 seats, were up forelectionin themidtermvote. The Peronist opposition movement holds the largest minority in both houses, whileMilei’srelatively new party has only 37 deputies and six senators.

The White House and foreign investors have been impressed by the government’s ability to significantlyreduce monthly inflation- from 12.8% beforeMilei’sinauguration to 2.1% last month – achieve afiscal surplus, and enact sweeping deregulation measures.

ButMilei’spopularity had fallenin recent months due to public frustration with his cuts to public spending and a corruption scandal tied to his sister, who also serves as his chief of staff.

Political experts said that more than 35% of the vote would be apositive outcomeforMilei’sgovernment and could allow him, through alliances with other parties, to block efforts by opposition lawmakers tooverturn his vetoesagainst laws Milei has said threatenArgentina’sfiscal balance.

Milei has said he expects a cabinet shake-up after theelectionthat could include members of the centrist PRO party, a frequent ally of the government in Congress led by former President Mauricio Macri.

Theelectionwill be welcome news to the White House. Trump’s potential $40 billion bailout of Argentina includes a signed $20 billion currency swap and a possible $20 billion debt investmentfacility.

Bonds and stocks are expected to rally on Monday as markets open, as the result gives Milei the votes and political capital needed to accelerate his reforms.

Following the results, many analysts predicta devaluationof the peso, which they say has been overvalued to contain inflation.